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Approved Minutes - 2024-04-02 s� CITY COUNCIL REGULAR MEETING MINUTES April 2, 2024 aRrr�o� 1. CALL TO ORDER Mayor Buck called the regular City Council meeting to order at 4:01 p.m. on Tuesday, April 2, 2024. The meeting was held both virtually via video conferencing and in-person in the Council Chamber at City Hall 380 A Avenue. 2. ROLL CALL Present: Mayor Buck, Councilors Afghan, Wendland, Verdick, Mboup, Rapf, and Corrigan Staff Present: Martha Bennett, City Manager; Ellen Osoinach, City Attorney; Kari Linder, City Recorder; Paul Espe, Associate Planner; Erik Olson, Senior Planner; Jessica Numanoglu, Community Development Director; George Burke, Police Chief; Clayton Simon, Police Captain Others Present: Members of the Planning Commission: Don Mitchell, Vice-Chair; Diana Moreno, Chair; Rachel Naujock; Dave Schenone; Philip Stewart; Kate Rogers, Consultant with MIG via video conferencing; Matt Hastie, Consultant with MIG via video conferencing 3. PLEDGE OF ALLEGIANCE Mayor Buck led the Council in the Pledge of Allegiance. 4. EXECUTIVE SESSION: The Lake Oswego City Council will meet under authority of ORS 192.660 (2)(h) Consult with Attorney regarding legal rights and duties of a public body with regard to current litigation or litigation likely to be filed; and (f) Consider records that are exempt by law from public inspection. Attorney Osoinach read the legal parameters for the Executive Session. The Council met in Executive Session from 4:04 p.m. to 5:07 p.m. Council took a recess and resumed the meeting at 5:29 p.m. City Council Regular Meeting Minutes Page 1 of 16 April 2, 2024 5. PUBLIC COMMENT • Stephanie Hallock, President, Friends of Luscher Farm Board, asked the City Council to allocate at least $1 million in Metro Share funds at its April 16 City Council meeting for better parking access and more community gardens at Luscher Parks. Both projects received support from the community in a recent survey and allocating the funds would demonstrate support for the important farmland and open space valued by residents of Lake Oswego. Mayor Buck confirmed the City Council had received Ms. Hallock's letter. • Joe Thompson, Mercy Housing, via video conference, urged the City Council approve a property tax exemption under ORS 307.540-548 for Mercy's new 100-unit affordable housing community on the former Marylhurst University campus. Approving the exemption prior to August 2024, when the organization converted from a construction loan to permanent debt, would create $1.2 million in savings over the lifetime of the loan and allow the organization to better maintain the property and cover escalating costs. The exemption would not result in lost revenue to the City, as Merrill University had long been a tax-exempt property. Mayor Buck asked whether the nonprofit low-income housing exemption or low-income rental housing exemption applied to the development. Mr. Thompson replied either exemption would apply, but the preferable option for Mercy House was the non-profit affordable housing owner program, ORS 307.540-548. That exemption was also preferable for the City because it would limit the number and type of properties eligible for the exemption to nonprofit owners. Mercy was aware of the required annual renewal, but that was less of a challenge for the organization. The key thing was getting the exemption before entering into the permanent debt structure because that would exponentially increase the value of the exemption. City Manager Martha Bennett sought to confirm the date the exemption was needed. Some written correspondence had an August date, and some a July date. Meeting the July date would be difficult. Mr.Thompson replied that he believed August 1 was the operative date, but he would confirm and follow up directly. City Manager Bennett said if the date was sooner, the City needed to know as soon as possible. 6. CONSENT AGENDA 6.1 Regional Water Providers Consortium Revised Intergovernmental Agreement. Motion: Move to authorize the City Manager to sign the Amended and Restated Intergovernmental Agreement of Regional Water Providers Consortium. 6.2 Adopting Findings and Conclusions for Ordinance 2938, An Ordinance of the Lake Oswego City Council Amending LOC Chapter 50 (Community Development Code) for purposes of Clarifying and Updating Various Provisions (2023); and Adopting Findings (LU 23-0036). Motion: Move to enact Ordinance 2938 and adopt findings for LU 23-0036. 6.3 Approval of Meeting Minutes. City Council Regular Meeting Minutes Page 2 of 16 April 2, 2024 February 6, 2024, Draft Regular Meeting Minutes February 20, 2024, Draft Regular Meeting Minutes Motion: Move to approve the meeting minutes as written. END CONSENT Councilor Mboup moved to adopt the Consent Agenda. Councilor Afghan seconded the motion. A voice vote was held, and the motion passed, with Mayor Buck and Councilors Afghan, Wendland, Verdick, Mboup, Rapf and Corrigan voting `aye', (7-0). 7. ITEMS REMOVED FROM CONSENT AGENDA No items were removed from the Consent Agenda. 8. PUBLIC HEARING 8.1 Ordinance 2944, An Ordinance Annexing to the City of Lake Oswego two Parcels, Consisting of 2.67 Acres at 13801 Goodall Road; Declaring City of Lake Oswego Zoning of R-15, Resource Protection (RP) and Habitat Benefit Area (HBA) Pursuant to LOC 50.01.004.5(a-c); and Removing the Territory from Certain Districts (AN 24-0007). City Attorney Osoinach read the hearing procedures and asked if any Councilor wished to declare any financial conflicts of interest. None were heard. Paul Espe, Associate Planner, presented the Council Report via PowerPoint and reviewed the properties' locations,jurisdictions, zoning, Resource Protection and Habitat Benefit areas, as well as sanitary sewer/water facilities. The properties were within the urban services boundary, and public services could be provided in a timely, orderly and efficient manner. Sanitary sewer service was available from a 10-inch collection line in Goodall Road. The City's Engineering Staff had determined the existing main line may not be deep enough to provide gravity service to the middle portion of the property, so individual private pumps may be required to serve development. Staff recommended approval of the annexation. Clarifying questions from Councilors were addressed as follows: • Sewer pumps at private houses differed than public sewer pumps. Private pumps were set up for individual properties at the developer's expense while public pump stations were usually identified in the City's Capital Improvement Projects and built to serve larger parts of areas that could not be fed through gravity. Once the sewage reached the main, it would be gravity fed. • There was sewer access to the east of the property along Goodall Road. The developer would be required to fill Sensitive Lands criteria and obtain permits. Currently, there was no access to the properties from the rear, however if the developer wished to access the property from the rear they would need to obtain Sensitive Lands approval. City Council Regular Meeting Minutes Page 3 of 16 April 2, 2024 • Staff understood that the property owner had submitted preapplication for land division. The access to the property was off Goodall and included delineation of the RP. The Applicant wished to develop access from Goodall Road and private roadway at the west of the property. Public Testimony: • Lynne Espy, resident, 13700 Shireva Drive, testified in opposition to the annexation, citing concerns about deer habitats and impact to neighboring property values if the land developed was developed with more than one residential unit per lot. Mayor Buck confirmed there was no further public testimony and closed the public hearing. Councilor Wendland moved to enact Ordinance 2944. Councilor Corrigan seconded the motion. A voice vote was held, and the motion passed, with Mayor Buck and Councilors Afghan, Wendland, Verdick, Mboup, Rapf and Corrigan voting `aye', (7-0). Council took a recess from 5:48 p.m. to 5:58 p.m. 9. JOINT STUDY SESSION WITH THE PLANNING COMMISSION 9.1 Housing Production Strategy (PP 22-0005). Mayor Buck welcomed members of the Planning Commission to the joint study session and noted the community had been engaged in developing the first ever Housing Production Strategy over the past year. The City was now reaching the decision-making point in the process. Erik Olson, Senior Planner, presented the Council Report via PowerPoint and reviewed the Housing Production Strategy (HSP) progress; public engagement and outreach; results of the recent online community survey; and summarized current housing needs, key housing gaps, and future housing needs. Kate Rogers, MIG, continued the PowerPoint, reviewing the package of recommended strategies supported by the Housing Production Strategies (HPS) Task Force, summarizing the timeframe for each strategy, and noting the level of community support shown in the recent survey for each strategy. The City was already pursuing strategies to remove/reduce parking requirements, seeking public-private partnerships for affordable housing, and using tax increment financing for near-term implementation. The Planning Commission and City Council had previously discussed Code audit and amendment strategies for near-term implementation; land rezoning as a medium- term implementation strategy to increase residential land capacity; modifying the Systems Development Charge (SDC) fee schedule based on unit size for a longer-term strategy. The presentation included a summary of newly recommended strategies: adding a hair housing policy to Lake Oswego's Comprehensive Plan; evaluating accessible design incentives or mandates; creating an affordable housing preservation inventory; and offering pre-approved plan sets for Accessory Dwelling Units (ADUs). City Council Regular Meeting Minutes Page 4 of 16 April 2, 2024 Mr. Olson noted that the term, "support" used in the presentation denoted a majority. Mild support was a plurality, and split was a plurality but within 10 points. Councilors expressed concerns regarding accessible design incentives that could allow taller buildings, pre-approved plan sets for ADUs that may be too standardized, and the proposal to amend the City's Comprehensive Plan to affirm fair housing policy and reverse concentrations of wealth in the city. Councilors were concerned about strategies that could result in development not in keeping with the character of Lake Oswego neighborhoods. Questions were addressed by Staff and the consultants with additional comments as noted: • Accessible Design Incentives were a potential sort of zoning bonus, and something the City already offered in certain zones for affordable housing development. For example, the City may allow an extra story to developers who designed 20 percent of their units to meet enhanced accessibility or Universal Design Principles. The incentive was an optional way of encouraging accessible units without requiring accessible units. • The amendment to the Comprehensive Plan affirming Fair Housing policies would allow the City to relate and reference the policy when appropriate.The City had to abide by Fair Housing policy per federal law, but there was a sense of intention behind including a statement in the Comprehensive Plan, like a proclamation. Including such a statement in Comprehensive Plan was a type of best planning practice. The statement did not indicate the support of Fair Housing policy was more important than other policies. • The statement regarding reversing wealth concentration was perhaps poorly worded but sought to affirm that people with low income were a protected class and that the City would not discriminate against individuals or households with low income. Nothing in the strategy itself necessitated the statement regarding the concentration of wealth. • Tax exemptions reduced the annual operating costs of buildings and the exemption targeted at rental housing would be rent controlled.There were for profit affordable housing developers, but the low-income rental exemption would require those developers to keep rents affordable for households at 80 percent area median income (AMI) or below. The exemptions lowered operating costs for the projects to allow for lower rents or put more money into building maintenance, upkeep and/or the programs offered. • Planning Commissioner Naujock, who worked in finance for affordable housing developer Hacienda CDC, addressed a question about the financial feasibility of affordable housing projects given the high development costs in Lake Oswego. • She explained her nonprofit typically received land from jurisdictions at no cost, but construction costs were similar statewide due to labor shortages. Roughly one-third of funds for a 60 percent AMI project came from competitively awarded federal low-income housing tax credits allocated by the State. Permanent debt financing covered another portion. The remaining funding gap was filled through other government programs like HOME funds, Community Development Block Grants, the Metro Housing Bond, and gap financing from sources like the Low-Income Investment Fund (LIIF). Piecing together the capital stack for an affordable housing project was complicated. Mr. Olson added that the higher the land costs, the more funding sources were typically needed. The City would likely need to pursue partnerships to make a project pencil out financially. • There were ways address the land shortage without adding 86 acres by using existing land more efficiently or adding non-residential zoned lands to residential zoning, though any rezoning would require neighborhood and resident outreach and Staff understood the City Council wished to accomplish housing production while protecting neighborhood character. Tonight's high-level conversation considered strategies like zoning bonuses to incentivize accessible design, which received feedback that not all Councilors were necessarily City Council Regular Meeting Minutes Page 5 of 16 April 2, 2024 interested in. Ultimately, strategies the City moved forward with would undergo more in-depth future discussion. • No one had identified the lack of plan sets for ADUs as a barrier, but having plan sets available at the City would make it easier for people considering the project because many did not know where to start, particularly homeowners who wanted to do the project themselves, and it was a type of housing that could be constructed by a normal resident rather than a large developer, and the units offered accessibility as well as the opportunity to age in place. • There were quite a few SDCs within Lake Oswego that took advantage of a Systems Development Charge (SDC) exemption in which the owner stated the ADU would not be used as a short-term rental (STR) and the and the City put covenants in place to prevent STR use. • The timeframes for strategies reflected community and Staff capacity. Time was needed to ensure public process and community support for strategies that were implemented. In addition, housing was one of many long-range planning issues and Lake Oswego had to be able to make a realistic commitment to the State government about the City's ability to implement the HPS. • Staff had considered the timelines in the documents and had taken input from the Task Force about the potential to develop the strategies more quickly, but it was a 6-to-8-year process. The HPS was a work plan for the next 6-to-8 years until the next Housing Needs Analysis was done and the City reconsidered how well the strategies were working. The City would have to report on its HPS progress and would know more about reporting responsibilities as the State set up the Housing Accountability and Production Office. City Council Straw Poll: Raise your hand if you are in support of the package of recommended strategies being included in the draft HPS. Unanimous support from Council. Planning Commissioners expressed concerns about the impact of plan sets for ADUs and the potential impact to neighborhood character. Responses from Staff and the consultants were noted as follows: • ADU plan sets would be pre-reviewed by the building department and undergo a streamlined review for Building Code conformance and to make sure the design worked on specific sites. In terms of meeting neighborhood-specific design standards, the plan sets would not supersede design standards and the designs would be in conformance with all the Zoning Code standards. The program could be designed in a number of different ways and the City could have different plan sets that worked in different neighborhoods. The City of Eugene had developed a whole menu of design plan sets that were developed by various architecture firms, which were offered in partnership with those firms at a subsidized rate of$500. • Though the City would have the ability to customize the program and create different plan more appropriate to certain overlays than others, to a certain extent the program would standardize things and create a set of discrete plans that could be used more than once. The City could work to tailor the plans to address input from the Council and Planning Commission and ensure ADUs were not used as STRs Planning Commission Straw Poll: Raise your hand if you are in support of the package of recommended strategies, including pre-approved ADU plan sets. Three out of five Commissioners indicated support. Ms. Rogers continued the presentation, summarizing the Task Force's recommendation to consider Zoning incentives as part of the Code Audit and Amendments Strategy and noting that Senate Bill 8 allowed for height/density bonuses for affordable housing developed by a non-profit. City Council Regular Meeting Minutes Page 6 of 16 April 2, 2024 The strategy was expected to have a low to moderate impact and had received mild opposition in the online community survey. The Task Force supported the idea but suggested it be included in the Code Audit and Amendment Strategy along with other ways to increase production by reducing Code barriers. Mr. Olson noted it was the only strategy where there was more opposition than support. Councilor Rapf commented that the Council had discussed zoning restrictions or easing of zoning restrictions before and agreed whatever was granted to affordable housing should be extended to all housing options. Mr. Olson noted the strategy was a component of the accessible design Councilors had expressed concern about earlier. Councilor Wendland raised concerns about potential unintended consequences if an affordable housing project enabled by Senate Bill 8's density bonus was proposed in an existing neighborhood. Mayor Buck stated having projects fit neighborhood standards was more likely to gain community support, but there was nothing the City could do about Senate Bill 8 itself. Councilor Wendland noted the City could still approve or deny an affordable housing project application. Mr. Bennett clarified any affordable developer must follow the City's Code, and under the Fair Housing Act, the City cannot deny a qualified project simply because it was affordable housing or due to factors like height limits. The development review process of applying existing Code must be followed. Mr. Olson added that this potential project discussion was not about Senate Bill 8 specifically, but whether the City would go further than what Senate Bill 8 allows. Planning Commission Straw Poll: Do you agree with the Task Force's recommendation to consider Zoning Incentives as part of the Code Audit and Amendments strategy? One Planning Commissioner indicated support. City Council Straw Poll: Do you agree with the Task Force's recommendation to consider Zoning Incentives as part of the Code Audit and Amendments strategy? One City Councilor indicated support. Ms. Rogers continued the presentation and described pre-approved plan sets for Middle Housing typologies, reviewing considerations for the strategy and its anticipated magnitude of impact. The majority of the Task Force supported including the strategy in HPS but found it to be a lower priority than pre-approved plans for ADUs. The online survey indicated moderate community support. Councilor Afghan expressed hesitation about supporting pre-approved plans if the cost savings would not benefit renters or buyers. Mayor Buck noted the Task Force had discussed the strategy as more of a market-rate strategy than an affordable housing strategy. With Middle Housing developments already occurring, templates would emerge from those examples. The cost to the City in terms of Staff time may not be worthwhile. Mr. Olson acknowledged the private market provided plans. The City could host a design competition or work with a local university to prepare quality plan sets at a lower cost. Ms. Rogers clarified the main cost would be Staff time facilitating the process with architects, who could do much of the plan preparation work, potentially as a marketing opportunity like in Eugene. Councilor Wendland did not think there was adequate staff time available. Mayor Buck agreed, stating this did not seem a top priority with limited resources. City Council Regular Meeting Minutes Page 7 of 16 April 2, 2024 Mr. Olson noted pre-approved plans would allow some City control to cater the designs as desired. City Council Straw Poll: Do you think Pre-Approved Plan Sets for Middle Housing should be included as a strategy in the HPS? No City Councilor indicated support. Planning Commission Straw Poll: Do you think Pre-Approved Plan Sets for Middle Housing should be included as a strategy in the HPS? No Planning Commissioner indicated support. Ms. Rogers: continued the presentation with a summary of Vertical Housing Development Zone (VHDZ) strategy, important considerations, and anticipated magnitude of impact. The Task Force did not recommend including the strategy in the HPS and had expressed a preference to focus more on affordable housing tax abatement programs. Affordable housing could be part of the program, but the City could not require affordable housing as part of a VHDZ. The community expressed mild support through online survey. Mayor Buck noted the City was using VHDZ in North Anchor and asked if the strategy would allow the City to continue to apply VHDZ property by property. Mr. Olson clarified the strategy would look at a larger mapping of a VHDZ and it would not apply in a targeted way to support a specific development. The VHDZ would promote mixed-use vertical development with residential on the floors above commercial. There was an extent to which the program could be designed with local criteria to encourage affordability in units above the commercial floor, but it could be a barrier to other affordable housing projects. Mayor Buck could understand the Task Force's recommendation against extending incentives to market-rate housing for now. With limited resources, tax abatement programs should be focused on clearly defined low-income housing, which was identified as the community's largest housing challenge. Councilor Afghan asked if the program could displace existing residents. Mr. Olson explained that to the extent the City incentivized new vertical mixed-use development in areas like the downtown commercial district, it could increase pressure to demolish smaller existing commercial buildings or affordable residential units to make way for redevelopment. City Manager Bennett provided the example of Foothills, which had a substantial number of existing residential units. Developers taking advantage of new development incentives could potentially displace current residents like those at Oswego Point apartments. Mr. Olson noted a displacement analysis would be required for any re-mapping. The displacement for North Anchor had been straight forward since the lots were vacant. A larger re-mapping area would make the displacement analysis more complicated. Planning Commissioner Naujock stated that in her experience with VHDZs in other jurisdictions, the program was very technical, and a development had to perfectly fit on a piece of land and conform perfectly with the City's Code to take advantage of the program. In addition, the key word was, "vertical." The program incentivized tall, five-story projects because it provided developers a 20 percent abatement for every floor of housing. A two-story building would net a 20 percent abatement, a three-story would net a 40 percent abatement, and so on. The program was not as valuable as it may have been meant to be and was not easy to operationalize. City Council Regular Meeting Minutes Page 8 of 16 April 2, 2024 City Council Straw Poll: Do you think the VHDZ abatement should be included as a strategy in the HPS? No City Councilor indicated support. Planning Commission Straw Poll: Do you think the VHDZ abatement should be included as a strategy in the HPS? One Planning Commissioner indicated support. Ms. Rogers continued the presentation with a summary of the Multiple Unit Property Tax Exemption (MUPTE) strategy, important considerations, and anticipated magnitude of impact. The Task Force liked the idea of using MUPTE in support of the strategy to encourage accessible units but did not necessarily support pursuing MUPTE as a standalone strategy because it was so broad it would be difficult to narrow down. The Task Force also did not necessarily support broad incentivization of multifamily or Middle Housing development without other requirements. The community indicated mild support through the online survey. Councilor Rapf understood the tax abatements were aimed at reducing operational costs, but asked how the City could ensure those savings were passed down to renters or owners. Ms. Rogers replied that without affordability requirements tying rents to certain income levels, there was no way to guarantee the savings benefited renters/owners with this program. It was intended as a production strategy to encourage building needed housing types without the affordability requirement. Mayor Buck likened it to the Vertical Housing Development Zone(VHDZ) but for different housing forms and asked if the strategy could by applied on a property-by-property basis like the VHDZ. Ms. Rogers replied the program could be limited to certain zones like around transit, or allowed citywide if criteria were met, but the City likely could not designate single properties. Mr. Olson agreed criteria would need careful crafting to target the intended housing types but was unsure about applying it project-by-project. Mayor Buck stated he was curious about using the program to incentivize accessibility, but he did not support it as a broad strategy to incentivize market-rate housing. Councilor Afghan commented the strategy could benefit everyone but asked if that was what the City was trying to promote. He believed the City wanted to help those with the greatest need. Mr. Olson replied the City had broad discretion to add criteria to the MUPTE program and could add an affordability component. There were other tax exemptions that were specifically oriented affordable housing, however, so the idea behind MUPTE was not to promote affordable housing but to potentially incentivize accessible units. The strategy was part of a stack to fulfill an identified housing need. Councilor Wendland asked if the MUPTE was aimed towards the type of projects a nonprofit developer would undertake. Mr. Olson replied a nonprofit developer would tax advantage of low- income housing tax exemptions. This program was for private developers, though it could be structured in a variety of ways. He believed it could also be structured to include mixed-income projects. The City had to set its requirements for affordability, and they did not have to cover 100 percent of the units. Councilor Wendland commented he was not sure that many units would be built under this program given the high cost of construction, and it was not worth giving up tax revenue when the benefit went to private parties. Mayor Buck noted the HPS Task Force prioritized serving the difficult to meet needs of the lowest income residents through nonprofit low-income housing and tax credits. While market-rate strategies were less favored to focus energies on affordable City Council Regular Meeting Minutes Page 9 of 16 April 2, 2024 housing, the HSP was aimed at producing a large range of housing types across different income levels. Something like a VHDZ could help make a project feasible, but the guarantee of affordable units in the project made it worthwhile for the community. Planning Commissioner Naujock commented that projects serving those at 60 percent of the AMI or less were eligible for a number of grants or subsidies, but above that, in the 80 percent AMI level, there were almost no subsidies or grants available. There was nothing to fill the gap for workforce housing and the community ended up with a gap. Developers built towards the top of the market because there were very few mechanisms available to incentivize middle market housing. There was a kind of affordability restriction for middle housing. She added that sometimes people thought market rate meant middle, but market rate for a ground-up development meant top of the market. Mr. Olson noted that if the City did target a more middle-income strata, the strategy might out compete other low-income housing tax exemptions. Mr. Hastie clarified that MUPTE may be a more attractive exemption for certain developers, if they had to choose between exemptions, and in that case may outcompete affordable projects. Mr. Olson added that was true for for-profit developers in particular. City Council Straw Poll: Do you agree with the Task Force's recommendation to consider MUPTE as an incentive for accessible housing with the condition it be used for affordable housing? Three City Councilors indicated support. Planning Commission Straw Poll: Do you agree with the Task Force's recommendation to consider MUPTE as an incentive for accessible housing with the condition it be used for affordable housing. Four Planning Commissioners indicated support. Mr. Olson asked if City Councilors and Planning Commissioners generally agreed with the Task Force recommendation to use MUPTE to promote accessible units. City Manager Bennett did not think there would be any change in the Council's position until more work was done. The program was vague, and the Council needed more details before the no votes switched to a yes vote. Ms. Rogers continued the presentation with a summary of the Construction Excise Tax (CET) strategy, noting important strategy considerations and anticipated magnitude of impact. The Task Force had discussed the strategy and expressed some concerns but indicated support for exploring the program and tailoring it to the City. The community expressed mild support in the online survey. City Manager Bennett asked if MIG included municipal projects in its calculations of potential CET yield because a lot of the commercial construction done over the past five years was public sector construction and potential dollar amount would be substantially lower if those projects were removed. Mayor Buck noted the City average 58 new single-family home applications per year. One percent of those 58 homes was not a high number. Mr. Hastie was not sure if the number reflected all construction. The calculations were put together by MIG's partner at Johnson Economics and would be easy to confirm, though the firm did understand what projects tended to be exempt. He would confirm the number for the City. Mr. Olson had reached out to other three other jurisdictions regarding program administration. Tigard and Milwaukie had not hired additional staff to administer the program and found the City Council Regular Meeting Minutes Page 10 of 16 April 2, 2024 administrative burden was low. The initial phase incorporating the program into the process of building permits did take time but after that, the program was administered through Accela. The biggest administrative burden was in managing whatever was being done with the funds. The City of Eugene had hired someone to administer the program in addition to a number of other affordable housing programs in Eugene. City Manager Bennett stated the City already collected a CTE on behalf of the school district and Metro. Collecting the tax would not be an issue for Staff capacity but administering programs with the funds collecting might be. Mr. Olson replied that Milwaukie issued a one-time RFP to affordable housing developers. The program was part of a larger package, and the funds were not the only revenue that would be used to develop affordable housing. Often, people came in with land or other money to contribute. Mr. Hastie added the Staff burden depended on how the program was crafted. If the program was used to backfill exempted SDCs, the Staff would really just be transferring money from one place to another. Mr. Olson clarified that four percent of the CTE revenue could be used for administrative costs. Councilor Rapf asked for clarification on what one percent of the average single-family construction was. City Manager Bennett stated the number was included in attachment number 5, page 6 of 6, of the report. Mr. Olson added the valuation provided to consultants included the construction costs of the project, including profit and overhead, but not the land cost. The average valuation for all of the 2023 new construction residential building permits in Lake Oswego was $717,000. One percent of that was$7,170. In addition, while the average valuation was $717,000, the average sales price was $2.5 million making the potential CET .3 percent of the sales price. Councilor Rapf was concerned the CET would be an additional barrier to people wanting to move to the community and while the City wanted to benefit some people, the tax would challenge everyone. Councilor Afghan stated the economy would impact the amount of CET collected and expressed concerns about the cost of administrating the work versus the amount that would actually go to help people. In addition, while taxpayers could be asked to pay for specific things it was difficult to ask taxpayers for funds that were not for a specific program. Councilor Wendland raised concerns about the administrative costs of a housing fund coming from the City's budget, which would need to be offset elsewhere. In addition, the City already had a number of existing taxes and fees, such as the Street Maintenance Fee and Demolition tax. There were many competing priorities for limited funds, and with rising taxes driving residents out of Multnomah County, Lake Oswego had to be strategic about new fees and taxes and avoid overtaking residents. Mayor Buck commented there was a standstill with multifamily construction, and while the funds generated by a CET could be put to good use, existing downtown projects required significant incentives and subsidies to pencil out given market conditions and interest rates. A CET in the current market may not help housing production and actually negate the value of a something like the MUPTE. The City should instead advocate for renewal of its local share Metro funding and put those funds to use to acquire land and facilitate public-private partnerships,which had enabled progress in Lake Oswego without a construction tax. Planning Commission Straw Poll: Do you think the CET should be included in the draft HPS? No Planning Commissioner indicated support. City Council Regular Meeting Minutes Page 11 of 16 April 2, 2024 City Council Straw Poll: Do you think CET should be included in the draft HPS? No City Councilor indicated support. Ms. Rogers continued the presentation and discussed contingent strategies that the City could not contribute much to without a CET or some other source of funding, such as community land trusts. There were ways to encourage land trusts to build affordable homeownership housing in the City through donating City-owned land, partnerships offering low-interest loans, or assisting in facilitating the County program to support housing rehabilitation and preserve low-cost housing. The strategies would probably not be included in the HPS because there was no potential revenue source. The presentation concluded with a summary of the Homebuyer Opportunity Linked Tax Exemption Program (HOLTI). The strategy, which would support homeownership options for moderate income households, was not recommended. The strategy was not feasible due to market dynamics and land costs, and it would not be effective at encouraging ownership for moderate income households. Mr. Olson summarized the next steps. The input received today would be incorporated into the draft HPS, which was scheduled to be released in June in advance of the final HPS Task Force meeting tentatively scheduled for June 21. The draft would be presented for feedback to City Council and Planning Commission at separate sessions in late June or early July. After incorporating that feedback into the HPS, the item would move into a hearing in the fall of 2024. Mayor Buck noted the request from Mercy Housing to grant its new facility the nonprofit low- income housing tax exemption. The City Council and Planning Commission viewed the exemption as part of the final HPS and now had the opportunity to support that project and give some certainty to the Hacienda project in Lake Grove. City Manager Bennett had indicated Staff could accelerate the exemption approval to meet Mercy's timeline. City Manager Bennett confirmed the majority of the City Council was willing to accelerate the exemption. Council took a recess from 8:05 p.m. to 8:15 p.m. 10. STUDY SESSION 10.1 Annual Police Department Update. Clayton Simon, Police Captain, presented the Council Report via PowerPoint and provided information on the number of dispatch calls, police incidents, calls for service, and traffic violations, noting changes over prior years. The presentation reviewed the 2023 Lake Oswego Statistical Transparency of Policing (STOP) Report, a required annual report to the State that collected certain demographic data for discretionary stops; provided in-depth information about how and when the Lake Oswego Police Department had used force over the past year; summarized the number and type of complaints received in 2023; and use of the Department's Behavior Health Specialist, Amber Hambrick. Clarifying questions from Councilors were addressed as follows: • Burglary involved a structure like a dwelling, whether occupied or not. Robbery involved the threat or actual use of force or a weapon to take property from someone. Theft involved incidents like stealing an item out of a car. There were two elements to burglary, which was City Council Regular Meeting Minutes Page 12 of 16 April 2, 2024 unique. A burglary involved a person entering a residence or a building and then committing a crime while in the residence. • When employment information was sent to the State, it became public. Anytime an individual left the Police Department, whether that person resigned or was terminated, the Department the Lake Oswego Police Department sent a form to the Department of Public Safety Standards and Training (DPSST) indicating the conditions under which the individual left the department, which usually triggered a response from DPSST asking for more documents to show what the cause was. • Each state had different background requirements, but Oregon's was fairly through and, thanks to 2021 legislation, standardized so all departments asked the same questions and received the information. Lake Oswego would provide the information to a new employer with a signed release from the applicant. Chief Burke noted the data indicating a decline in the numbers for behavioral health but suggested the decline was due to Ms. Hambrick's unavailability. When combined with West Linn, the numbers increased. As the Department continued to focus on behavioral health, it hoped to reassess the position and determine if there was a need for it to be a full-time position. Chief Burke continued the presentation with a high-level review of overdose data from the past year, which the Department tracked using OD Tracker. The presentation demonstrated there was an increase in across every category of overdose over the prior year. Captain Simon confirmed the incident of a 6-year-old overdosing was due to accidental ingestion. Chief Burke expressed gratitude to the legislature for making the difficult decision to repeal portions of Measure 110 and hoped change resulted in a focus on treatment. As the City moved down the recriminalization phase, the Department would continue to focus on treatment first options. The Department's perspective was that jails did not need to be full of people with issues centered around addiction, and the Department wanted to find ways to get people the treatment they needed. Chief Burke concluded with comments on recruitment and retention, and noted the Department did a good job of attracting recruits to Lake Oswego, and Lake Oswego itself was attractive. The Department hoped to do more to keep people interested in policing a community like Lake Oswego. The Department was a young organization and its officers, at times, became enamored with the idea of fighting crime in a big city. The Department was looking at ways to encourage people to stay with Lake Oswego by providing alternatives and ways to get involved in some other activities, such as participating in task forces or working with other law enforcement agencies on a loan basis. In the next year, the Department could potentially lose four people to retirement and was preparing others to take over those positions. Getting officers involved in things outside Lake Oswego and expanding their horizons would keep people interested in working in the City. In addition, the support the City Council gave the Department did not go unnoticed. Chief Burke had not experienced the same level of support in any other community in which he had served. Captain Simon thanked Dave Arpin for his help in crafting a "sizzle" reel for recruitment and shared the video, which was the precursor to a longer project, with the Council. Councilor Mboup stated he was grateful for the Police Department's work but concerned about the increasing number of overdoses. He asked about the current status of recruitment. Captain Simon replied the Department was hiring right now and hoped to bring five to backgrounds soon. City Council Regular Meeting Minutes Page 13 of 16 April 2, 2024 Mayor Buck asked if the Department's School Resource Officers (SROs) did any sort of prevention work. Chief Burke replied that the SROs were involved in different conversations in the schools and were able to highlight the issues. They would love to spend more time of the prevention side. Captain Simon added the SROs did give presentations and talked about different drug use where they could. Mayor Buck suggested the State's reform efforts recognized prevention so there could be future opportunities, and there was more room for community partnerships around prevention in schools, specifically. Councilor Rapf commented the SROs had established good relationships with the students which helped build trust between students any police officer. He asked if the Department's Behavior Health Officer was under resourced or if she should join the Department full time. Chief Burke replied the City had applied for a grant through Clackamas County to fund a caseworker to help take care of some of the follow-up activities Ms. Hambrick was involved in and be more proactive with people the Department saw over and over again. City Manager Bennett said adding more funding for behavior health could be discussed as part of the budget process next year. The City should not expand any programs right now because it did not know how large the subsidy to operate the Lake Oswego Recreation and Aquatic Center would be, and the Council did not want to fund one program only to find a hole in another existing program. Chief Burke said the Department was using Dr. Cloud software, which allowed the clinicians heading up different behavioral health units to share data amongst themselves and provide critical information to the Department when dealing with people who were in crisis, though there was some question around HIPAA protocol. The data was shared between Oregon City, Milwaukie, West Linn, Lake Oswego, and Canby, but not the County. The Department was in conversation with the County about having the databases talk to each other. The County had the same system, it was just exclusive to the County. Councilor Afghan confirmed Ms. Hambrick provided training to officers and stated he would rather train officers in behavioral health than hire a full-time person and not provide training to officers. He asked for clarification on the definition of, "handgun displayed." Captain Simon explained that if there was a report of a weapon present, an officer may decide to remove their handgun and hold it in a "sul" position, where it was not pointed at anyone but could be readily deployed if the situation escalated. If the officer felt the subject could perceive the handgun, it was documented as a display of force. Pointing the handgun directly at a subject was a separate, escalated level of force. What Lake Oswego reported as "use of force" was more thorough than other cities. Councilor Afghan suggested for the Department to consider in advance whether one part of its organization may become overwhelmed as the number of incidents went up and asked them to consider in what ways they would like to see the Department improve. Councilor Wendland asked if the Department anticipated statistics increasing due to the revised Measure 110 action the legislature had taken. Chief Burke stated the Lake Oswego Police Department made a shift last year in its approach to drug possession cases. Unlike many other agencies that did not prioritize issuing citations for possession, Lake Oswego wanted to participate in the system and refer people for treatment when possible so officers were directed to cite for possession of user amounts under 2 grams in order to capture that data and ensure treatment services were being offered to the community. The Department did not want to contribute to the problem by overlooking these incidents. With the recent change making drug City Council Regular Meeting Minutes Page 14 of 16 April 2, 2024 possession an unclassified misdemeanor, which was essentially a Class A misdemeanor, there was increased governmental interest in allowing the Department to take a more robust enforcement approach and get involved in situations they may have otherwise walked away from previously. The goal was to potentially have a greater impact, with a focus on how increased enforcement could translate to saving lives through treatment interventions. City Manager Bennett confirmed the Police Department would be part of implementing the Council's "20 is Plenty" goal. When the City installed the signs, the community would expect the number of citations issued to increase. While citations may increase somewhat, officers realistically would not be pulling over drivers for going 22 mph, though some residents may expect strict enforcement. An educational conversation would be needed about enforcement realities versus changing driver behavior on local streets. Councilor Wendland noted meeting many great new officers and asked if the Department risked losing them due to Lake Oswego being perceived as boring compared to higher crime areas. Chief Burke said the Department hoped to keep officers interested by offering them opportunities outside the City, such as giving them a taste of law enforcement in other communities to broaden their perspective and appreciate working in Lake Oswego. Mayor Buck thanked the Department for its responsiveness to neighborhood issues, involvement in community meetings, and helpful presence in schools as well as its traffic enforcement efforts, both on main streets and smaller neighborhood streets where walkability is important for calming traffic. City Manager Bennett thanked Chief Burke and Captain Simon for the increased transparency in numbers which directly the finding in the 2021 Community Dialogue on Policing asking for more transparency. 11. INFORMATION FROM COUNCIL Mayor Buck stated he met with Clackamas County Chair Tootie Smith and other mayors the previous week. The County was expected to unveil funding allocations this week, though reports may not be posted publicly right away. Lake Oswego had submitted a $3 million plan for supportive housing services dollars, including funding for the City's food pantry and Police Department. City Manager Bennett clarified the County made $5 million available to cities to support efforts related to homelessness prevention, behavioral health, or addressing related issues. However, the total funding requests from cities exceeded $5 million. Mayor Buck engaged in regional transportation planning conversations with the Joint Policy Advisory Committee on Transportation (JPACT) and Clackamas County Coordinating Committee (C4) in preparation for the 2025 legislative session. A key focus was ensuring ODOT understood local transportation funding needs, not just state freight movement priorities. Both the State and cities face long lists of unfunded projects requiring collaborative strategy. 12. REPORTS OF OFFICERS There were no reports of officers. 13. ADJOURNMENT City Council Regular Meeting Minutes Page 15 of 16 April 2, 2024 Mayor Buck adjourned the City Council meeting at 9:15 p.m. Respectfully submitted, Kari Linder, City Recorder Approved by the City Council on May 21, 2024. Al Joseph Buck, Mayor City Council Regular Meeting Minutes Page 16 of 16 April 2, 2024